Government spending stimulates Thailand's economic growth in 2018, 2019

BANGKOK, December 24 (TNA) - The Bank of Thailand (BOT) and the National Institute of Development Administration (NIDA) say that the country's gross domestic product (GDP) should now grow by 4.2-4.3 per cent year-on-year in 2018, propelled mainly by the government's spending on mega-investment projects and populist policy. Speaking at a media seminar in Khon Kaen Province in the Thai Northeast on Monday, BOT Governor Dr. Veerathai Santiprabhob assessed that Thailand's GDP should grow by 4.2 per cent year-on-year in 2018, before experiencing a slight slowdown in 2019 when the national economic growth should stand about 4 per cent year-on-year. Dr. Veerathai acknowledged the BOT's updated figures of Thailand's GDP growth this year and next year should be in line with the country's real economic conditions, stimulated mainly by the government's mega-investment projects that would continue to trigger expanding private investment plans. According to the BOT governor, other positive factors that should continue to stimulate the Thai economy next year include expanding domestic consumption and employment. The BOT government cautioned, however, that the Thai economy next year should face such risk factors as impacts from the ongoing trade war between the immense Chinese and the US economies, China's economic restructuring, geopolitical tensions in the Middle East, protests against the governments in Europe and Britain's exit (Brexit) from the European Union (EU). Meanwhile, Prof. Dr. Montree Socatiyanurak, Director of NIDA's Advance Master Managent (AMM) Program, projected that Thailand's GDP should grow by about 4.3 per cent year-on-year in 2018, stimulated mainly by the government's mega-investment projects, populist policy and exports to the world market, before further expanding in a slower pace at about 3.7-4.0 per cent year-on-year in 2019. Prof. Dr. Montree told journalists that the Thai government's mega-investment plans on, for instance, extended electric train routes in Greater Bangkok, a dual train route in the Thai North and new infrastructure plans in the Eastern Economic Corridor (EEC) Project, worth over 450 billion baht, as well as populist policy should continue to mainly propel the national economic growth next year, especially in the second half of 2019 following the new general election in late February and the then formation of the new Thai administration. Besides, a total investment budget of over 400 billion baht of Thai state enterprises should be another factor to stimulate the national economy next year. The NIDA senior academic warned, however, that expanding household debts and vulnerable farm produce prices should become risk factors against the national economic growth in 2019 despite the, anticipatedly, sound domestic consumption in the first half of next year, proposing that the newly-elected Thai government should take urgent action to address the problems. (TNA)